US government cuts grants to Jewish college, citing fraud

The US government has barred a Jewish college in suburban Detroit from participating in a popular grant programme after finding that almost 2,000 students lived full-time in Israel and weren't taking classes through the school.
The Michigan Jewish Institute broke its fiduciary duty to the US Education Department, which supplies Pell grants of up to USD 5,775 this year, and provided false information to an accrediting agency, the government said in a February letter obtained by the Detroit Free Press.
The school, referred to as MJI, declined to comment on the allegations, saying "that could be taken as politicising the matter." The Free Press reported today it is affiliated with the local chapter of the Chabad-Lubavitch, an Orthodox Jewish group.

Under the Pell grant programme, the money goes to a college, which typically applies it toward a student's tuition and fees. Any leftover money can be paid to the student for other expenses, according to a government student aid website.
"The evidence shows that almost 2,000 US citizens, who were full-time Israeli residents, received Pell grants for ostensibly 'studying abroad' in Israel at Israeli institutions between 2006 and 2012," the Education Department's letter to Rabbi Kasriel Shemtov said.
"Not a single one of them ever physically attended classes at MJI and none of them graduated from MJI."
The Education Department said the full-time Israeli residents were "enrolled" in MJI so the school could partly use the money to fund its own operations. The government called it a "scam."

It's not clear what steps will be taken next. The school has told students to come up with other money to pay bills.